According to the Brookings Institution, an estimated 20 million taxpayers will qualify for an exemption from the Affordable Care Act’s penalty for failing to have insurance. It’s not known how many of those who qualify for the exemption will actually claim it. To check the available penalty exemptions, visit the IRS website at www.irs.gov.

The IRS reports that its enforcement budget has been cut by $254 million, a 5% reduction from the previous year. As a result, the Agency expects to cut the number of individual and business audits it conducts. In 2014 the IRS audited 0.86% of individual taxpayers and 26% of large corporations. Though audit statistics show a decline in examinations, the IRS contacts many more taxpayers with questions about their returns. Once statistics include these taxpayer contacts, the 2014 return examination rate is closer to 4% or one in every 25 returns filed.

A new simplified Roth IRA is the latest retirement plan. The account is called a myRA (short for “my retirement account”). It’s funded by having your employer make direct paycheck deposits to your retirement account. The contributions to your myRA are invested in government-guaranteed Treasury securities. A myRA isn’t connected to your employer; it belongs entirely to you and can be moved to any new employer that offers direct deposit capability. The annual contribution limits that apply to regular Roth IRAs apply to myRAs.

How close to the edge are you when it comes to tax phase-outs? As you begin your midyear tax planning, consider the effects of these benefit-limiting provisions. Knowing how close you are to the “edge” can help preserve tax breaks for 2015.

Many phase-outs are based on modified adjusted gross income, or MAGI. MAGI is the adjusted gross income shown on your tax return as “modified” by adding back certain deductions. The “add-backs” vary with specific phase-outs. That means you might have to choose between conflicting opportunities. For instance, if you have a child in college this semester, the American Opportunity Credit and the Lifetime Learning Credit may be on your mind. Both benefits are education-related, yet the qualifying rules differ – including the MAGI threshold.

Here are some common federal tax benefits with MAGI phase-outs. [Read more…]

If you hold foreign bank or financial accounts and the total value of your account exceeds $10,000 at any time during the calendar year, you may be required to file a Treasury Department report known as the FBAR. It’s easy to overlook this requirement because it’s separate from your federal income tax filing, with a different deadline and strict rules.

FBAR refers to “Form 114, Report of Foreign Bank and Financial Accounts.” Your 2014 Form 114 must be filed electronically with the Treasury Department no later than June 30, 2015. No filing extension is available. Contact us if you need details or filing assistance.

June 15, 2015, is the due date for making your second installment of 2015 individual estimated tax. Your check to the United States Treasury should be accompanied by Form 1040-ES. June 15 is also the due date for calendar-year corporations to make their second quarter 2015 estimated tax payment.

Ohio has become the latest state to withhold child support from gambling winnings.

Under a new law, anyone who wins $600 or more in the state lottery or at one of the state’s racetrack casinos will be cross-checked against a database of people who have unpaid child support obligations. Any money owed will be taken out of the person’s prize.

People who win at least $5,000 will also be screened for back taxes and unpaid student loan obligations. [Read more…]

A Maryland woman had a baby that was conceived when she was still married, but wasn’t born until after she got divorced.

After the baby was born, a man she knew claimed that he was actually the father of the child – and not the woman’s ex-husband. He demanded a genetic test to prove his paternity. The woman refused, and the case went to court.

The result? The man lost. The Maryland Supreme Court decided that whether the man was entitled to a paternity test depended on what was in the best interests of the child. And in this case, the man was unable to prove that it was in the child’s best interests to possibly be declared illegitimate. [Read more…]

The California Supreme Court recently handed a big victory to Frankie Valli, the lead singer of The Four Seasons, in a dispute over life insurance with his ex-wife Randy.

While they were married, Frankie bought a life insurance policy and named Randy as the sole owner and beneficiary. A year later, the couple divorced. Randy claimed that since she was the sole owner, she should get to keep the entire policy, which was worth $365,000.

But Frankie argued that even though Randy was named as the sole owner, the policy was purchased with joint funds, so half of it belonged to him. [Read more…]

When 80-year-old Beverly Marsico decided to divorce her 84-year-old husband Louis, Louis had no interest in participating in the proceedings. He asked his daughter by a previous marriage, whom he had designated as having power of attorney, to appear in court on his behalf.

But Beverly objected, and a New Jersey judge ruled that Louis had no right to avoid participating in his own divorce proceedings, even if he wanted to.

The judge said that the participation of the actual parties in a divorce is critical for determining the facts and resolving all issues equitably. [Read more…]

When most people think of child support, they think of a parent who doesn’t have custody paying money to the parent who has custody to help meet the child’s needs.

But a recent case in Illinois shows that child support can work the other way around as well.

When Steven and Iris Turk divorced, he earned about $150,000 a year and she earned less than $10,000 a year. Iris got custody of their two children, and Steven was ordered to pay child support. [Read more…]

Life in the military can be extremely stressful on a marriage. Deployments can keep a spouse away for months at a time, periodic relocations at unpredictable intervals can be very disruptive to family life, and the psychological stress of serving in a combat zone can cause problems even after a spouse returns from active duty.

It’s no surprise that, according to a Defense Department survey, military divorces have increased dramatically in the years since September 11, 2001.

Like a military marriage, a military divorce can be very complicated. It can create logistical, geographical and legal issues that wouldn’t even occur to most civilians. [Read more…]

A UPS driver can sue the company in court for sex discrimination after losing her job, even though her union’s collective bargaining agreement also established a grievance procedure for such claims, according to a federal appeals court in New Orleans.

UPS argued that the grievance procedure in the agreement was the employee’s only means of complaining. But the court said the union contract didn’t clearly limit discrimination claims to the grievance process, and therefore the employee could also file a lawsuit in court.

Many states have laws that protect employees from being discriminated against based on their “marital status.” A recent lawsuit in New Jersey suggests that these laws may extend to employees who are going through a divorce.

In the New Jersey case, the director of operations for a local rescue squad separated from his wife as a result of an affair he had with a co-worker on the squad. This made things extremely awkward in the workplace, because the man’s mother-in-law and two of his sisters-in-law also happened to work for the squad.

About a month later, the man’s boss fired him, noting that he and his wife were “going to go through an ugly divorce.”

The man sued, and claimed he had been discriminated against because of his marital status. [Read more…]

Many jobs require employees to be “on call” when they’re not at work. But are employees entitled to be paid for this time? The answer, as so often happens, is, “It depends.”

A recent lawsuit involved a police officer and emergency medical technician in Maryland who was required to be on-call after her scheduled shift. She filed a lawsuit in federal court, claiming she was entitled to be paid for her on-call hours.

But a judge ruled against her. The judge said that during her on-call time, she wasn’t restricted in any way. She could stay in her home or she could travel around the area, and she could eat, sleep, watch TV, and spend time with her child. In other words, the fact that she was on-call didn’t interfere with her ability to engage in all her normal personal activities. [Read more…]

Pregnant employees are entitled to certain rights under a federal law called the Pregnancy Discrimination Act. This law can sometimes be confusing. Recently, the federal Equal Employment Opportunity Commission issued guidelines designed to clarify how the law applies to workers and employers.

Here are some highlights:

The law prohibits discrimination against workers who are pregnant, but it also prohibits discrimination against workers based on their having been pregnant in the past or their possibly becoming pregnant in the future. Among other things, this means that it might be illegal for a business to ask questions of a job candidate designed to probe whether the candidate has children or plans to have children in the future.

A business cannot force a worker to take leave just because she is pregnant. A business can force a pregnant worker to take leave only if the pregnancy makes her unable to do her job.

Only women can take leave for pregnancy, childbirth or related medical conditions. However, if an employee offers parental leave to women after childbirth, it must also offer parental leave to men on the same terms.

An employer has to treat a pregnant employee who is temporarily unable to do her job the same way it would treat a non-pregnant employee who was temporarily unable to do a job. This means that if other employees would be given a temporary light-duty assignment (say, as a result of an on-the-job injury), then similar accommodations must be made for pregnant employees.

Deborah Malin worked in the IT department of a health care company. When she told her boss that she was going to report a co-worker to the human resources department for sexual harassment, her boss strongly discouraged her. But she reported the co-worker anyway.

Over the next three years, Deborah applied for several promotions, but she didn’t get any of them. Three years later, her department was reorganized, and she was demoted. She filed a lawsuit claiming that her boss had retaliated against her because of her harassment complaint three years earlier.

Her company argued in court that three years is a long time, and it didn’t make any sense to claim that Deborah was still being held back for something that happened literally years in the past. [Read more…]

Everyone knows that a business can be sued if an employee is harassed because of race, sex, religion, etc., and the company doesn’t take appropriate action. But did you know that a business can sometimes be sued even if the harasser doesn’t work for the company?

That’s right – businesses sometimes have a legal duty to protect their workers from harassment by third parties, such as clients, customers, contractors, vendors, and other people they come into contact with in the course of their work.

A company that leases office space, for example, might have to protect against harassment by security guards or maintenance workers hired by the landlord, as well as by caterers and others who are brought in to do work on-site. [Read more…]